- The Commodity cancelled an upcoming roundtable on sports event contracts
- The CFTC announced the roundtable in February, seeking information on sports-related event contracts
- Dustin Gouker broke the news for his “Event Horizon” substack
This week was supposed to be a clarifying moment for the much debated sports event contract market.
Instead? We’ll be left with more questions than answers, as the Commodity Futures Trading Commission has cancelled a planned roundtable on the sports event contract market and have yet to announce if it will be rescheduled.
Dustin Gouker last week broke the news on the cancelled roundtable in his “Event Horizon” substack.
No Reason Given For Cancellation
The CFTC last week cancelled the roundtable – which had originally been scheduled for Wednesday, April 30 – but did not provide a reason for the cancellation or an update on when, or if, it will be rescheduled.
The much-anticipated meeting was announced in February by the commission with the goal of developing “a robust administrative record with studies, data, expert reports, and public input from a wide variety of stakeholder groups to inform the Commission’s approach to regulation and oversight of prediction markets, including sports-related event contracts.”
The CFTC was expected to gather information from all parties involved in the sports event prediction markets and eventually release an opinion on the legality of the contracts. Several lawsuits have been filed by Kalshi in response to state cease-and-desist notices, as the company has said it will not stop offering the market unless directed to do so by the CFTC.
A number of state gaming regulators have been monitoring the sports event contract market since the likes of Kalshi, Robinhood, and Crypto.com began offering the new prediction markets in late 2024. At least six states have sent cease-and-desist notices to the companies to halt the trading of the sports event contracts, which they believe too closely mirror sports betting.
Several states are also monitoring the situation to see if any action is necessary.
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Kalshi Fighting Back With Lawsuits
While several states have issued cease-and-desist notices, Kalshi has also taken to the offensive and filed three lawsuits in response to the notices.
Kalshi sued both Nevada and New Jersey gaming regulators in late March in response to the notices. It filed another lawsuit last week against John A. Martin, Secretary of the Maryland Lottery and Gaming Control Commission and Director of the Maryland Lottery and Gaming Control Agency.
At the heart of the issue is the key question as to who actually regulates sports event contracts. Kalshi believes that state regulatory bodies do not have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
The Nevada Gaming Control Board levied a cease-and-desist notice against Kalshi in early March, ordering the company to stop offering its sports event contract markets in the state by March 14. The New Jersey Division of Gaming Enforcement issued its own cease-and-desist against Kalshi and Robinhood on March 27, giving the companies until midnight, March 29, to pull their sports event contract markets from the state.
Kalshi did not acquiesce to either cease-and-desist notices, instead suing the boards for their orders.
The first victory most recently went to Kalshi, as U.S. Federal Chief Judge Andrew P. Gordon granted its request for a temporary restraining order and preliminary injunction against the Nevada Gaming Control Board, effectively allowing Kalshi to continue offering its sports event contracts in Nevada as the litigation continues.
The Commodity Futures Trading Commission (CFTC) recently made the decision to cancel the Sports Event Contract Roundtable, which was set to take place in the coming months. This decision has raised questions and concerns among industry professionals and stakeholders about the implications of this cancellation.
The Sports Event Contract Roundtable was intended to bring together experts from various sectors, including sports leagues, teams, and betting operators, to discuss the regulation of sports event contracts. These contracts allow individuals to place bets on the outcome of sporting events, and they play a significant role in the sports betting industry.
One of the key implications of the cancellation of the roundtable is the potential delay in addressing important regulatory issues surrounding sports event contracts. These contracts are a critical component of the sports betting market, and their regulation is essential to ensuring fair and transparent betting practices.
Additionally, the cancellation of the roundtable could hinder efforts to combat illegal sports betting activities. Without a forum for industry stakeholders to come together and discuss best practices for regulating sports event contracts, there is a risk that illegal betting operations could continue to thrive unchecked.
Furthermore, the cancellation of the roundtable may have broader implications for the sports betting industry as a whole. The lack of a dedicated forum for discussing regulatory issues could lead to uncertainty and confusion among industry participants, potentially stifling innovation and growth in the market.
Overall, the CFTC’s decision to cancel the Sports Event Contract Roundtable has raised concerns about the future of sports event contract regulation and its impact on the sports betting industry. It remains to be seen how industry stakeholders will respond to this development and what steps will be taken to address the regulatory challenges facing the market.
